The Bitcoin “Death Cross” Approaches
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So why is bitcoin refusing to rebound? However, not everyone sees the recent sideways trading as a bad thing. Unfortunately for those trying to make heads or tails of the technical indicators around the bitcoin price, deciphering them could prove to be a challenge.
Then again, volatility is nothing new when it comes to cryptocurrencies. Newsbtc suggests the bitcoin price chart could be set up for a further pullback, noting that it was trading inside a descending channel on the one-hour price chart.
The day simple moving averaged crossed below the longer-term timeframe, which suggests that further declines seem more likely than a new rally. The gap between these levels is widening as well, which suggests that the bears are gaining more and more control over the bitcoin price. Meanwhile, the day simple moving average lines up with the high end of the retracement, so that could end up signaling a correction. One of the most well-known bearish chart patterns is the death cross, and the bitcoin price chart looks to be on track to forming one, according to several experts.
Even though a death cross would be a bearish signal though, CoinDesk argues that it could end up trapping the bears. Death crosses appear on price charts whenever the day moving average crosses the day moving average in a downward trend. Chart technicians see this pattern as a signal that a bear market is taking hold and could last a while, and some have been warning for the last couple of weeks that if the death cross finally forms, it could trigger a massive selloff in bitcoin.
CoinDesk feels these fears are overdone, however, because the death cross often ends up being a contrarian indicator that happens following a massive bearish trend. The site also states that the chart pattern frequently suggests that a price rally is coming soon. CoinDesk identifies the start of the current bearish trend as Feb. The site argues that all the bearish energy will likely be burned out by the time the death cross finally appears.
Looking back at the bitcoin price over the years, CoinDesk found three previous death crosses on the chart, and in two of the three incidences, the chart pattern did not trigger a massive sell-off. Trader Brian Stutland identified an interesting correlation between the bitcoin price and the U.
He told CNBC that the two are trending together, although he said the reason for it is unclear. If there continues to be a positive correlation between bitcoin and the U. We are starting to hear this theme, as Abra CEO Bill Barhydt told Business Insider this week that he believes institutional investors in the West are going to dive in this year, which will support the bitcoin price and open up the floodgates. He believes that when financial institutions in Japan started investing in cryptocurrencies late last year, it triggered the price rally, and he predicts a similar phenomenon this year when Western financial institutions enter the market.
He said his conversations point to increasing interest from institutional investors, even though Google Trends data shows a downward trend in Google Searches on crypto-related topics. Another sign that could point to firmer adoption of cryptocurrencies is if the prices start to trade sideways. This would signal stabilization, which gurus generally see as a good thing because it would make it possible to actually use cryptocurrencies as payment methods because volatility would finally fall.
He said that an increase in sideways trading will only raise the possibility of wider adoption. Like Barhydt, he reports growing interest in cryptocurrencies, despite the fact that prices have been sliding. A death cross is forming on the bitcoin price chart One of the most well-known bearish chart patterns is the death cross, and the bitcoin price chart looks to be on track to forming one, according to several experts.
Looking for long-term adoption Trader Brian Stutland identified an interesting correlation between the bitcoin price and the U.
Why sideways trading in the bitcoin price could be a good thing Another sign that could point to firmer adoption of cryptocurrencies is if the prices start to trade sideways. Latest News Marble Arch Closes. Search News On ValueWalk.
